Users “are in the driver’s seat” in the new IBM-Lenovo partnership writes Wikibon Principal Research Contributor Stuart Miniman in his Professional Alert “Impact of the IBM Lenovo Agreement on PureSystems, Storage and Beyond”. Miniman quotes IBM SVP and Group Executive of IBM Software and Systems Steve Mills in an interview on theCUBE saying that the IBM’s sales of its entire x86 business, including the System x server line and its network switches, was driven by declining revenues and the maturity of the x86 technology, which made it difficult for IBM to differentiate.

Customers and IBM business partners shouldn’t worry about the move, says Miniman. IBM and Lenovo have a track record of providing solid transitions, as evidenced by IBM’s sale of its PC business to Lenovo in 2004. Moving System x to Lenovo also creates an opportunity for IBM to strengthen partnerships with ISVs that might otherwise compete with it, in particular Microsoft and VMware, which is looking for allies against Cisco, now that John Chambers has labeled VMware “enemy #1.”

IBM is not exiting the server business entirely but rather focusing on its Power 8 RISC processor line and the OpenPower Foundation. IBM maintains control over its storage line, including the storage systems used in the PureFlex converged systems that it is also transferring to Lenovo. IBM will also provide applications – PureFlex is usually sold pre-configured with software – and support. The companies also said they’ll cooperate in sales of PureFlex and System x products.

Lenovo will need that help as it faces competition from Cisco, which has been cutting into IBM’s dominance of the high-end x86 server market, and original design manufacturers such as Quanta that are “poised to eat the entire server market at low margins.”

As with all Wikibon published research, this alert is available without charge on the Wikibon Web site. IT professionals are invited to register for free membership in the Wikibon community which allows them to participate in and influence the direction of Wikibon research as well as to publish their own comments, questions, and written research.

Graphic courtesy Lenovo